Variations of this topic comes up on a regular enough basis that I'm just going to give you my standard reply, sorry for the long post!.
First, different people have different styles. What works for me (and the advice that follows) may not work for you.
I'm a lazy person. I don't do much more than what is absolutely necessary for preparation. So for me the basic prep steps include figuring out who's who, what creatures the PCs might encounter and setting and scenery.
Start Small
Even if your campaign starts out in a bustling metropolis, you only need a small amount of information. A list of people that are important in the daily lives of the young adventurers (which your players can, and should help with), a list of people that have direct influence over the area (whether king, magistrate or district council) and a list of people of which they may have heard vague rumors (the king of a large region, or neighboring countries).
But that list should be small, maybe a dozen, certainly less than 20. In addition, you only need vague descriptions and an outline of who these people are
from the perspective of the adventurers. For the people that are in that tertiary list? They may not even know the name. Also see "Power Players" below.
Remember that historically, people lived their entire lives and were only really affected by a 20 mile radius of where they were born. I have a map of my entire world, but even though I've been DMing for a long, long time, probably 80% of the world just has some vague outline and a couple of lines of description on who and what lives there.
Set Dressing
Does your campaign take place in a metropolis or wilderness? Desert or Frozen north? Think about how to describe the locale. Buildings where there is a lot of snow will have steep roofs, buildings in a desert will often have flat roofs and tall ceilings (heat rises). Middle of a forest? A lot of the construction will be timber, whereas someplace with fewer trees may have more rock buildings.
What mix of races and cultures do you have? A bustling port city is going to feel different from an isolationist wilderness outpost. A city with a relatively high population of dwarves may have a preponderance of heavily built gray stone buildings with slate or copper roofs. It's a city built to last, with the beauty in the durability of the structures. A city influenced by elves will have more greenery, soaring architecture. Nothing is meant to last forever, so embrace graceful beauty while we can.
How prevalent is magic? Are the streets lit with continual flame lamps or is magic only whispered about in dark corners?
Who are the power players in the region.
A band of orcs in the area? They've probably been raiding local villages.
I'll want some kind of town leader I can go to, that can reward/motivate the players.
Maybe someone in the village is secretly helping the orcs. I jot a note down about this but don't worry about it too much. If it sounds appropriate when we're playing I'll throw it in.
Do the orcs have a leader that stands out from the crowd? I don't need one but if I have a fun idea I go with it. Think of LOTR or The Hobbit movies with their mass of generic orcs and a handful of orcs with highly distinctive look and feel.
Do the orcs answer to anyone? This can be left vague for the moment - maybe a symbol of a black star is prominent. I don't really care about the black star other than as a possible hook for future development.
Are there any other conflicting groups? Perhaps a group of ogres is demanding payment from the orcs, making them more daring/reckless than usual.
I generally limit power players to 2-5 in any given area, more than that and it gets too complex. It can be as simple as good guys vs bad, or complex court intrigue. But even if it's the latter, there are less than half a dozen power centers with some individuals that may have conflicting loyalties (there may be sub factions that I can expand on later).
Where is this happening?
Once again, I only do what I need. I have a rough map of the area, but honestly rarely map out details of city streets or buildings. Instead I think about what type of area I have (wilderness, city, temparate or desert) and jot down some notes.
If my adventure is set near a small village with some nearby ruins, I will have an idea of where things are and may or may not have some things sketched out. I frequently describe things at this stage as
what do the PCs know? Most people only know their local area and only have a vague idea of anything outside of 20 miles away from home.
What events are in play
Largely based on the power players and their motivations, this is also kept at a high level. I know in my scenario that there has been low-level warfare going on between orcs and humans. That if nothing is done, it may erupt into full fledged war (and may end in war no matter what).
There may be other things in play however. A local kingdom may be pressuring the local villages into becoming vassals. There are rumors that they are secretly paying the orcs to raid villages to put pressure on them to accept protection. Is it true? Heck if I know.
Or maybe the orcs are fleeing the hills because there's some dark power rising that they cannot fight. The organization behind the black star could become an unwilling ally in the "enemy of my enemy is my friend" type of way. If that happens, there will be a great deal of conflict between the various factions who support the idea versus those that will never willingly ally themselves with orcish brutes.
Dangling Plot Lines
I like to end my session with a summary of where the PCs are, and options of which direction to go next. Do they investigate the orcs, or try to track down the rumors of the dark power and let the local militia take care of the orcs? Do they want to investigate what's going on with Felicia the Mad, who I just threw in as a random NPC?
Listen to what your characters seem interested in, what they talk about during the game. They can inadverantly give you some good ideas.
Random Lists
I rely heavily on improvisation with the aid of a few lists. What kind of lists? Do a google search for "random ____ name" for taverns, people, items, you name it. One site for example is behind the name for when I want somewhat realistic names based on real world cultures. I have a cheat sheet that I can refer to, so if someone wants to talk to the orc guard I can give it a name other than "Grog". I then make a note on my cheat sheet that the group interacted with "Yolmar, Son of Furbog", and that Furbog may be upset that they killed his boy.
You can also get character descriptions, motivations and so on. There are tavern generators for example that will give you a menu. Play around, find one you like. Generate a handful of entries for whatever you think you may need.
After the Game
After the game I like to do a quick summary for myself. I usually try to do this the day of or the day after the game. Quick things that summarize what happened so I can remember later on.
If I'm really ambitious (doesn't happen all that often, I'm lazy) I'll post a summary from the character's point of view.
Session 0
Whether you have a literal face-to-face session 0 or just chat over email, it's good to do some up front prep work. Here's my suggestions.
Do you allow evil?
Decide whether or not you want to allow evil characters. Some people enjoy playing and DMing for them, but I don't so I don't allow them. I also know that one of my players (my lovely wife) will always want to play a good character and it's not fair to her to force her character to play with someone her character would never associate with. If you can't decide have a secret vote. If even one person doesn't want to allow evil characters, don't allow them. I keep hearing about these amazing groups that were all evil, but I've never seen it work. Your mileage may vary.
Don't be a jerk.
Never assume that someone isn't going to bring a narcissistic, chaotic character who's only goal seems to be causing disruption in the group. If you want to be a griefer, play a video game. Along these lines, I simply don't allow PVP theft, murder or other shenanigans (unless someone is being controlled). I've seen hurt feelings between players (not just their characters) because the party rogue decides they're a kleptomaniac. Just say no.
It's all about relationships.
Everyone in the party should know at least one other person in the party. They don't have to all know each other, but usually they should know at least one other person even if only as a distant cousin or someone they know by reputation. I have occasionally thrown people together by having them being raw recruits in a nation about to be invaded but I'm more likely to have a couple of sessions of them as children.
Why are you an adventurer?
Every PC should have an answer for this. Gold? Glory? The greater good? Because you ran away and you need to do something to survive?
Set the scene.
As a DM, you need to give your players a broad overall picture of the type of campaign you're envisioning. Don't write a novella on your background (or if you do, don't make it required reading) but give them a rough idea. "It's a time of war, when orcs threaten to destroy your peaceful kingdom..." is enough. It should be a paragraph or two at most. I give information I think the commoner on the street would know, which often isn't much.
Listen to your players.
I'm not talking about just listening to feedback when you explicitly ask for it, but also pay attention when they chat among each other. I've gotten some of my best ideas from players when they say things and think I'm not paying attention.
Have fun, and don't sweat the small stuff
Different groups game for different reasons. For some it's just an opportunity to roll some dice while eating junk food and talking about their daily lives. For others it's about building a deep fantasy world where when you are at the table you
are Torg the Barbarian who has never heard of this "football game" of which you speak. Let the group guide you as much as you guide them and try to find a balance.
Just remember that nobody is a perfect DM. If people are engaged and having fun you are doing it right. Good luck!
